I was speaking about you, of course. If you want to name me in case something happens to you, well, I wouldn't complain.

i'm sure you wouldn't....

Don't know if this really helps, but a few ideas to consider:

• Expiration: No activity for two years = Breakage
• Changing Point Redemption Values: When you report liability for miles, I'm sure that you have to put it in monetary terms, as if it was a currency. If the airline inflates the cost for redemption, they are effectively devaluing their "currency" which would allow them to write off a portion of their accumlated mile related obligations. A 10% overall increase in prices is basically the same as a 10% write off of miles (or?).

Some points:

1. Breakage in Travelers Checks for one very large issuer is running at roughly 2.1%, and they're as good as cash, but some people never cash them.
2. Breakage in Time and Savings Deposits has sometimes been as high as 1/2%, with people either forgetting or never redeeming.
3. In loyalty programs the ratios have been much higher, often higher than 20%, sometimes well above that.

Most loyalty programs have three basic causes fro breakage:
1. Small balances that are simply abandoned;
2. Balances that have been allowed to expire, some of which can be very large (a recent example, obviously an outlier, had 1.7 million miles expire in an airline programs I examined)
3. Unreported death, divorce or other status change that ends out with abandonment.

There are obviously many other specific reasons. Many studies of breakage in bank accounts, tax refunds, ticket refunds/credit vouchers, loyalty programs etc have been made.

BTW, in some multiple participant loyalty programs (eg UK Nectar) the program manager keeps all breakage, thus wildly increasing program profitability. Most airlines make much of the money they make on their mileage programs by selling points as if redemption would be 100% then having actual breakage rates of 20% or more.

They really don't need to deflate the miles to make a lot on money on these programs. It's only people like FTers who tend to watch their balances well enough to keep them.

I sign up for a program if there are points available but often may not earn enough to be able to redeem before they expire.
Recently I have started to explore ways of keeping programs active and of transferring points between programs. However it always comes down to a cost benefit question - are the points worth the effort involved in retaining them?

I know a lot of family members get caught up in mileage changing expiry dates. I bet huge amounts of miles are lost that way.